The role of information and communication technology on human development: evidence from Malaysia

Increased income fueled by high economic growth translates to improvement in the standard of living and well-being. It is well-documented that advancement in information and communication technology (ICT) stimulates economic growth and development; nevertheless, it may also fuel inequality among the ICT haves and ICT have-nots. Those with limited ICT access and usage could face further deprivation of socioeconomic opportunities and empowerment. Despite reportedly being one of the most digitally connected countries in the world, Malaysia’s rate of ICT penetration remains concentrated at urban areas and states with high Gross Domestic Product (GDP). Moving away from the widely studied ICT-economic growth nexus, this study therefore, attempted to examine the role of ICT on human development particularly in Malaysia. This study employed a static panel data estimation approach based on an annual dataset of 13 states and 3 federal territories of Malaysia from 2010 to 2019. Our main variable of interest, human development, was measured by the Human Development Index (HDI). ICT variables were divided into two dimensions: ICT access and ICT use. ICT access was measured by the number of mobile cellular subscriptions, percentage of households with computer, and percentage of households with Internet access. ICT use was measured by the number of mobile broadband subscriptions, number of fixed broadband Internet subscriptions, and percentage of individuals using the Internet. Findings show that three out of six ICT variables tested in this study emerged with significant and positive effects. This finding suggests that an increase in the number of households with computer, mobile broadband subscriptions and Internet users is associated with an increase in the human development. Drawing on the comparison in effect magnitude between ICT access and ICT use, it was also found that ICT use appeared to be of greater importance to human development. This study only used a composite index, HDI to measure human development, thus omitting the impact of ICT on each of the three components of HDI – health, education and standard of living. This study is beneficial to policymakers in designing and implementing policies directed at accelerating widespread access to and use of ICT across all levels and sectors of the economy. Empirical findings from this study contributes to the body of literature by examining the distinct impact of two ICT dimensions (ICT access and ICT use) in influencing human development in Malaysia